Guide to Auditor Panels

The Local Audit and Accountability Act 2014 (the Act) abolished the Audit Commission, paving the way for local authorities to appoint their own external (local) auditors.

Principal authorities must have their local auditors appointed by 31 December 2017 in order for them to begin their engagement on 1 April 2018. Smaller authorities that have decided not to opt in to sector led body audit procurement arrangements will need to appoint their auditors by 31 December 2016.

The main method for principal authorities and those smaller authorities that decide to opt out to carry out this responsibility will be through auditor panels, so authorities must therefore begin to consider the method of appointment as soon as possible to allow themselves to have the necessary arrangements in place to undertake this process sooner rather than later.

This user-friendly guidance considers in depth the various options available to authorities for setting up an auditor panel:

• individually
• jointly with another authority or authorities
• using another authority’s own auditor panel
• using an existing committee or sub-committee to carry out the role.

It then goes into the practical detail of appointing the auditor panel, including:

• the logistics of running the panel
• the specific role it plays in the appointment, resignation or removal of the local auditor
• the other important statutory functions that it carries out, such as advising the authority on maintaining an independent relationship with the auditor.

This publication is aimed at those within local authorities who will have a role to play in deciding how and who to appoint as their organisation’s local auditors.

It has been commissioned by DCLG, and a working group including DCLG, NAO, Public Sector Audit Appointments Limited (PSAA) and other stakeholders have ensured that the guidance is relevant and specific to authorities.

Other relevant authorities and health bodies who are covered by the Act may also find it useful when considering whether and how to establish auditor panels.